In the course of its ongoing restructuring, Siemens AG is planning to transform its Electronics Assembly Systems unit (EA, brand name Siplace) into a wholly owned, legally independent subsidiary of its Drive Technologies Division (DT), through a so-called carve-out move. As Guenter Lauber, CEO of EA and head of the Siplace team, underlines, “As an independent business unit we are able to operate even more flexibly and focused, while we still have access to the Siemens infrastructure when useful”.
Guenter Lauber emphasizes that the rumors in the industry about the buyout of the placement equipment commerce to a private equity company are definitely untrue and misleading. “We don’t think about such a solution since we have no reason for that. Rather, we will become an independent unit of Siemens AG shortly within this financial 2007/2008”. It is noteworthy to remark in this context that from the very beginning about 25 years ago, the Siplace business has been a sort of an independent small expert machinery company headed for a long time by Rainer Rohm, within the huge Siemens corporation mainly engaged in electronics and electrotechnical businesses.
To date, Siplace is reportedly by far the market leader in Europe. It also belongs to the three most important global players in the assembly equipment arena with a staff of about 2100. But the Siplace activities are part of an automation unit within the Siemens AG that has 70,000 people and a structure conforming to that huge size. The smaller unit however can adjust to its own business size and needs, using shorter and eventually more cost-efficient methods to do its job. Looking at the different units sizes also reveals that Siplace is dealing globally with 3000 to 5000 customers, while the Siemens AG has far more than 100,000 patrons.
As an illustration, some background: In the placement machine market, the industry expects a global volume of around 2.6 bn euro. Siplace is said to amount to a three-digit, middle-sized million turnover. In the last fiscal they had their market share rise by even another 6 % in Europe. However, every machine supplier who produces mainly in the euro zone now suffers heavily when delivering to the dollar area. Just within twelve months the euro shows a rise of 30 % again against the US dollar. It seems therefore to be extremely hard for every company in this situation to earn enough money in order to be profitable in every respect, even with a full book of orders. But the current financial crisis puts another heavy burden on the industry which needs credits to finance investments in capital equipment. The scenario is apparently multi-facetted now, but all is pointing to even more critical developments in this globalized business.
As Guenter Lauber points out, “We look forward to becoming a wholly-owned Siemens subsidiary, because an independent EA unit opens the door to great opportunities for the entire Siplace team. As a business unit of Siemens AG we had to integrate ourselves into the overall structure, processes and procedures of a large company. The new constellation provides us with more freedom and more opportunities and will enable us to tackle many improvements that had originally been scheduled for the coming years in order to prepare ourselves for the future and the global market. Now we can become much more effective and even more customer-oriented. As the industry and innovation leader, we are a major player in the market – a position that we will significantly expand, either alone or in partnership with others”.
The CEO further says that Siplace is in good condition, since the market position in Europe is excellent, and the Asia business also continues to develop in a satisfactory way. The support from the Siemens Corporation is said to be good in the restructuring phase. He does not expect changes in the Siplace structure with the European headquarters in Munich and strong local headquarters in the US (Norcross/Georgia), and in Singapore for Asia. “Such a individual structure has not been standard within the Siemens AG. However, in our business it is indispensable”. The tight global service and support network will also be cultivated in the future as before. “I’m deeply convinced that our experienced Siplace experts make the difference for our global customers. These employees can then react with even more speed, more focused and flexibly”.
The company’s conversion from a regular business unit of the DT Division to an independent subsidiary is said to will have been completed by the end of September 2008. In addition to process improvements, this strategic move should provide additional opportunities which are currently being assessed, such as a joint venture with other companies in the electronics industry, a sale of the business unit or an even complete spin-off. Siplace plans to use its new independence to accelerate its processes and make them even more customer-oriented in order to be even better prepared for the global marketplace. “Our excellent global business relationships will be strengthened by the new position”, the CEO thinks, “because the company’s independence will enable our globally leading sales network with its experienced Siplace sales partners to focus on the needs of our customers all over the world even more effectively than before”.
“The global Siplace team welcomes this decision”, Guenter Lauber resumes. “Since it will enable us to respond more flexibly to our customers’ needs with faster processes and more direct global access in the regions. The Siplace management has regarded such an independent position under the Siemens umbrella for useful for a long time. Now we can go on”.
(Gerhard B. Wolski)
EPP Europe 400
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